You deposit $1,000 in a long-term certificate of deposit with an fixed interest rate of 9%.How many years will it take for you to triple your deposit? Pick the closest
Answer.
A)11 years
B)12 years
C)13 years
D)14 years

Question

Quizplus · Accepted Answer

To calculate the number of years it takes to triple your deposit, we can use the compound interest formula: 
A = P*(1 + r/n)^(n*t)
where:
A = final amount (3 times the initial deposit, or 3*$1000=$3000)
P = initial deposit ($1000)
r = annual interest rate (9%)
n = number of times the interest is compounded per year
t = number of years
We want to solve for t, so rearranging the formula gives: 
t = [ln(A/P)/ln(1+r/n)] / n
Plugging in the values: 
t = [ln(3)/ln(1+0.09/1)] / 1
t ≈ 12.67
Rounding up to the nearest whole number gives 13. So it will take approximately 13 years to triple your deposit. therefore C) is the correct answer.

You Deposit $1,000 in a Long-Term Certificate of Deposit with an Fixed